Active Duty Retirement Pay. The law includes a provision which allows increases in retirement pay calculation, for members who serve longer than 30 years. Under previous law, retirement pay was capped at 75 percent. With this change, members will receive 75 percent of their base pay for 30 years of service, plus 2.5 percent for each year of service after 30 years. That means someone serving for 40 years will be eligible to receive 100 percent of their base pay for retirement. This is effective for military retirements on or after January 1, 2007.
Voluntary Separation Pay. The new law allows (not mandates) the services to pay separation pay for members with between 12 and 20 years of service, who volunteer to separate during a reduction in force. The Navy and Air Force asked for this option, as they continue their active duty force reduction. The Army, Marines, and Coast Guard are not expected to take advantage of this provision. Under the old law, separation pay was only authorized for those with more than 6 years of service who are involuntarily separated, under honorable conditions. The authority to pay voluntary separation pay is effective on October 1, 2006, and expires on December 31, 2012.
Thrift Savings Program Matching Funds. Last year, Congress passed a provision which allowed the Army to test a program in which the service matches contributions to the federal Thrift Savings Program. The test was due to expire on October 1, 2006. The new law contains a provision which extends the test period until December 31, 2008.
Damaged Household Goods Replacement. The new law requires all contracts for transporting personal property of military members and their families to contain a clause promising to pay full replacement value for lost or damaged goods. This applies to both household goods and hold baggage moved after March 1, 2008. This means that members will no longer have to purchase separate property-moving insurance in order to replace items lost and damaged during military moves.
Life Insurance. Under previous law, the government paid the premiums for the first $150,000 would of Servicemember's Group Life Insurance (SGLI), for military members deployed to Iraq or Afghanistan. Under the new law, the government will pay the premiums for $400,000 worth of coverage.
Hospitalized Meals. A provision which prohibits charging military members for meals during periods when they are hospitalized for illness or injuries related to support of contingency operations in Iraq or Afghanistan, has been extended for one year (until December 31, 2007). If there are no objections from the Department of Defense, Congress plans to make this provision permanent in next year's bill.
Bonus Expansions. The new law extends existing bonuses for one year, and authorizes several bonuses to be increased. The maximum reserve health care bonus, for reserve health care officers increases to a new cap of $25,000. Nuclear officer incentive pay is now payable in either a lump sum, or annual installments, and nuclear career accession bonuses have been increased from $15,000 to a maximum of $30,000. Additionally, dental officer special pay can now be paid out during internships or residency programs. The maximum bonus from transferring from one service branch to another (such as under the Army's Blue to Green Program) increases from $2,500 to $10,000.
The new law also increases the dental officer accession bonus to a maximum amount of $200,000, and allows an accession bonus of up to $400,000 for dental and medical officers in critically short wartime specialties. The law also authorizes (not mandates) an $8,000 officer accession bonus, which is payable (at the discretion of the individual service) in a lump sum or installments upon completion of Officer Candidate School.
